Stricter Border Controls Impose economic burdens: Business Warnings
Trade organizations issue warnings about potential drawbacks of tighter customs regulations for commerce - Trade organizations issue alerts on potential drawbacks of tighter trade border controls.
Folks, let's dive into the latest brouhaha surrounding tighter border control measures and their implications for trade, as per the German Chamber of Industry and Commerce (DIHK).
Ammunition for the argument comes from the mouth of Volker Treier, the head honcho of foreign trade at DIHK, who spilled the beans to the Handelsblatt. During the Corona crisis, Treier has stressed that impromptu border shutdowns are a serious economic burden. Meanwhile, efforts to curb irregular migration should never overshadow the need to ensure smooth border traffic and cross-border trade. The European internal market and the Schengen area are, according to Treier, absolutely vital for the internationally integrated German economy.
Treier didn't mince words, pointing out that enhanced border controls would instigate hefty storage costs and complicate just-in-time deliveries, thus adding unnecessary burdens to the economy during testing times.
DIHK believes that increased restrictions imposed on cross-border commuters and service providers would be especially detrimental to certain sectors, such as regional retail, border gastronomy, and the healthcare sector - all of which thrive on mobility of goods and people.
DIHK's foreign trade president, Dirk Jandura, suggests that any restrictions should be time-limited, because if stricter controls are required to safeguard the population, he's on board – but only for a finite period.
Industry insiders, like Dirk Engelhardt, chairman of the Federal Association of Goods Transport, Logistics, and Disposal, count on clenched fists and close collaboration between the Ministry of the Interior and Transport to steer clear of major trade-disrupting snafus. The idea is to establish "Green Lanes," speedier lanes for truck traffic at borders, thereby hastening the border-crossing process.
The CDU's Thorsten Frei, Chancellor's Office chief, said in the Welt am Sonntag that the solution to the current immigration predicament lies in "intensive, temporary" controls during a short span so as not to restrict the freedom of movement indefinitely or jeopardize Schengen Agreement.
While the CSU's Alexander Dobrindt expressed his intention to intensify and boost border rejections to bring down the numbers of irregular migration, the DIHK, the logistics industry, and businesses in general are wary of the potential economic downsides.
Now, let's take a gander at why the DIHK is raising the red flag.
- The disruption of cross-border trade and supply chains due to sudden border closures
- Decreased economic competitiveness and efficiency for businesses, especially those dependent on just-in-time delivery and cross-border supply chains
- Negative impact on business confidence and investment, due to uncertainty and increased administrative hurdles
- Short-term decline in regional economic activity in border regions, owing to reduced cross-border labor mobility and trade
- Incrementing political and social tensions owing to the reinforcement of divisions between "insiders" and "outsiders," perhaps complicating future European cooperative economic policies within the EU
Bottom line? Tighter border controls may sound like a smart move in theory, but these guys are issuing a warning that such measures risk hitting the economy where it hurts – and that's never a damned good idea.
- The German Chamber of Industry and Commerce (DIHK) warns that stricter border controls could impose significant economic burdens, particularly on businesses, due to hefty storage costs and complicated just-in-time deliveries.
- DIHK highlights that increased restrictions on cross-border commuters and service providers could negatively impact sectors like regional retail, border gastronomy, and healthcare, all of which rely on mobility of goods and people.
- Dirk Jandura, DIHK's foreign trade president, advocates for time-limited restrictions on border traffic, as he recognizes the necessity of stricter controls for public safety but seeks to avoid long-term economic consequences.
- Industry insiders, such as Dirk Engelhardt of the Federal Association of Goods Transport, Logistics, and Disposal, appeal for close collaboration between the Ministry of the Interior and Transport to establish "Green Lanes" for truck traffic at borders, improving the border-crossing process.
- Thorsten Frei, the Chancellor's Office chief from the CDU, proposes a solution to the current immigration predicament by suggesting intensive, temporary controls to safeguard the population without indefinitely restricting the freedom of movement or jeopardizing the Schengen Agreement.
- The DIHK, logistics industry, and businesses in general are concerned about the potential economic downsides of increased enforcement of border controls, including disrupted cross-border trade and supply chains, reduced business competitiveness, decreased investment, short-term declines in regional economic activity, and increased political and social tensions.
